OSBA presses State Land Board to get full value of Elliott State Forest

Monday, May 1, 2017

An outside legal firm representing OSBA has notified the State Land Board that the association will work with school districts to take legal action if the board does not realize the full value of selling the Elliott State Forest.

In a letter dated April 28, OSBA requested that the board either complete the sale of the forest, the proceeds of which would go into the Common School Fund, or deposit $220 million in the fund.

“The State Land Board has a clear obligation to the boys and girls of this state,” said Jim Green, OSBA’s executive director. “That responsibility is to ensure that the Common School Fund receives maximum value from the proposed sale of the Elliott State Forest.

“If the State Land Board is not going to follow its constitutional duties, then we have to step up and protect the Common School Fund for today’s schoolchildren and future generations.”

The forest was established in 1930 to create income for the Common School Fund, mostly through logging. Environmental regulations have limited logging on the land in recent years, however. From 2013 to 2015, instead of receiving income from logging operations the fund paid about $1.35 million a year in forest management and fire protection costs.

Oregon’s attorney general stated in 1990 that: “The State Land Board’s duty is to maximize the financial return from (Common School Fund forest) lands for the benefits of the Common School Fund,” according to the letter from Davis Wright Tremaine LLP.

Because the forest was costing the school fund money, it was put up for sale in 2015. It was later appraised at $220.8 million. Education advocates said conditions placed on the sale reduced the land value to that amount, but they supported selling the land over continuing to let it cost the school fund.

At that meeting, State Treasurer Tobias Read proposed amending the protocol for the sale and continuing negotiations. Gov. Kate Brown agreed, and the board voted 2-1 to reconsider the sale at the board’s next meeting. Secretary of State Dennis Richardson opposed, saying it was a flawed deal but the state had already agreed to sell the land and needed to move ahead.

The board’s April meeting was cancelled, and the board is scheduled to meet May 9.

In the meantime, Brown has pushed to keep the Elliott State Forest in public hands, possibly by buying it through some sort of state bonding. Some have sought to keep the land public for scenery, recreation or environmental reasons. But it’s not clear the bonding proposal would deliver the full value of the land to the fund.

According to a legal opinion OSBA obtained from an outside firm, the State Land Board is required to only consider the needs of schools and cannot consider any other competing desires.